7 Pro forma balance sheet: Basic Leonard Industries wishes to prepare a pro forma balance sheet for December 31, 2016. The firm expects 2016 sales to total $3,000,000. The following information has been gathered: (1) A minimum cash balance of 550,000 is desired. (2) Marketable securities are expected to remain unchanged. (3) Accounts receivable represent 10% of sales. (4) Inventories represent 12% of sales. (5) A new machine costing $90,000 will be acquired during 2016 . Total depreciation for the year will be $32,000. (6) Accounts payable represent 14% of sales. (7) Accruals, other current liabilities, long-term debt, and common stock are expected to remain unchanged. (8) The firm's net profit margin is 4%, and it expects to pay out $70,000 in cash dividends during 2016. (9) The December 31,2015 , balance sheet follows. a. Use the judgmental approach to prepare a pro forma balance sheet dated December 31, 2016, for Leonard Industries. b. How much, if any, additional financing will Leonard Industries require in 2016 ? Discuss. c. Could Leonard Industries adjust its planned 2016 dividend to avoid the situation described in part b? Explain how